ASX:WAT

Stock Analysis Report

Executive Summary

Waterco Limited engages in the manufacture, wholesale, and export of equipment and accessories in the swimming pool, spa pool, spa bath, rural pump, and water treatment industries in Australia, New Zealand, Asia, North America, and Europe.


Snowflake Analysis

Flawless balance sheet and fair value.

Share Price & News

How has Waterco's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WAT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

WAT

-0.5%

AU Leisure

0.03%

AU Market


1 Year Return

7.1%

WAT

7.6%

AU Leisure

14.6%

AU Market

Return vs Industry: WAT matched the Australian Leisure industry which returned 7.6% over the past year.

Return vs Market: WAT underperformed the Australian Market which returned 14.6% over the past year.


Shareholder returns

WATIndustryMarket
7 Day0%-0.5%0.03%
30 Day5.6%-4.6%-0.4%
90 Day3.2%-2.0%5.7%
1 Year9.8%7.1%9.5%7.6%19.7%14.6%
3 Year72.9%59.9%2.5%-2.3%38.7%20.2%
5 Year147.4%110.2%13.2%3.9%50.7%17.1%

Price Volatility Vs. Market

How volatile is Waterco's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Waterco undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WAT (A$2.27) is trading below our estimate of fair value (A$9.54)

Significantly Below Fair Value: WAT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WAT is poor value based on its PE Ratio (26.8x) compared to the Leisure industry average (18.5x).

PE vs Market: WAT is poor value based on its PE Ratio (26.8x) compared to the Australian market (18.7x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate WAT's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: WAT is good value based on its PB Ratio (1.1x) compared to the XX Leisure industry average (1.6x).


Next Steps

Future Growth

How is Waterco forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

19.2%

Forecasted Consumer Durables industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Waterco has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Waterco performed over the past 5 years?

14.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WAT has high quality earnings.

Growing Profit Margin: WAT's current net profit margins (3.2%) are lower than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: WAT's earnings have grown by 14.2% per year over the past 5 years.

Accelerating Growth: WAT's earnings growth over the past year (7.3%) is below its 5-year average (14.2% per year).

Earnings vs Industry: WAT earnings growth over the past year (7.3%) exceeded the Leisure industry 0.7%.


Return on Equity

High ROE: WAT's Return on Equity (3.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Waterco's financial position?


Financial Position Analysis

Short Term Liabilities: WAT's short term assets (A$67.1M) exceed its short term liabilities (A$39.9M).

Long Term Liabilities: WAT's short term assets (A$67.1M) exceed its long term liabilities (A$23.7M).


Debt to Equity History and Analysis

Debt Level: WAT's debt to equity ratio (30.1%) is considered satisfactory.

Reducing Debt: WAT's debt to equity ratio has reduced from 48.2% to 30.1% over the past 5 years.

Debt Coverage: WAT's debt is well covered by operating cash flow (36.8%).

Interest Coverage: WAT's interest payments on its debt are well covered by EBIT (4.6x coverage).


Balance Sheet

Inventory Level: WAT has a high level of physical assets or inventory.

Debt Coverage by Assets: WAT's debt is covered by short term assets (assets are 2.9x debt).


Next Steps

Dividend

What is Waterco's current dividend yield, its reliability and sustainability?

2.20%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WAT's dividend (2.2%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.29%).

High Dividend: WAT's dividend (2.2%) is low compared to the top 25% of dividend payers in the Australian market (5.35%).


Stability and Growth of Payments

Stable Dividend: WAT's dividend payments have been volatile in the past 10 years.

Growing Dividend: WAT's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (59.1%), WAT's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

16.2yrs

Average board tenure


CEO

Soon Goh 0

AU$431,948

Compensation

Mr. Soon Sinn Goh, B COM, FCPA, is the Founder of Waterco Limited and serves as its Chairman and Chief Executive Officer and also has been its Member of the Board since its inception in February 1981. In 1 ...


CEO Compensation Analysis

Compensation vs Market: Soon's total compensation ($USD286.61K) is about average for companies of similar size in the Australian market ($USD251.09K).

Compensation vs Earnings: Soon's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Soon Goh
Founder0yrsAU$431.95k52.88% A$43.6m
Weng Goh
Group Marketing Director & Director9.7yrsAU$260.52k1.49% A$1.2m
Garry Norman
Non-Executive Director26.3yrsAU$65.55k0.43% A$352.1k
Ben Hunt
Non-Executive Director21.7yrsAU$65.55k0.47% A$386.4k
Cheng Fah Ling
Independent Non-Executive Director10.8yrsAU$65.55kno data

16.2yrs

Average Tenure

Experienced Board: WAT's board of directors are seasoned and experienced ( 16.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Waterco Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Waterco Limited
  • Ticker: WAT
  • Exchange: ASX
  • Founded: 1981
  • Industry: Leisure Products
  • Sector: Consumer Durables
  • Market Cap: AU$82.521m
  • Shares outstanding: 36.35m
  • Website: https://www.waterco.com

Number of Employees


Location

  • Waterco Limited
  • 36 South Street
  • Rydalmere
  • New South Wales
  • 2116
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WATASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992

Biography

Waterco Limited engages in the manufacture, wholesale, and export of equipment and accessories in the swimming pool, spa pool, spa bath, rural pump, and water treatment industries in Australia, New Zealand, Asia, North America, and Europe. It also manufactures and sells solar heating systems for swimming pools and pre-heat industrial solar systems. The company’s pool and spa products comprise water saving products, chlorine free systems and spa products, infloor cleaning systems, mineral crystals, swimming pool pumps, filtration systems, pool heating products, chlorination products, controllers and automation products, pool lighting products, Swimkleen pool cleaners, automatic pool cleaners, and commercial products. Its pool and spa products also include pool filter media products, recirculation and maintenance accessories, blowers, values, spa equipment, chemical pool products, and test kits. The company’s water treatment products include commercial filter media and cooling water filtration products, cartridge and bag filters, centrifugal filters, and fiberglass media filters; and residential pressure pumps, centrifugal filters, water filters, water softeners, and drinking water purifiers. It also provides aquaculture equipment, such as life support and recirculating aquaculture systems. In addition, the company franchises retail outlets for swimming pool equipment and accessories. Further, it engages in formulating, packing, and distributing swimming pool chemicals to independent pool stores and stores in its Swimart franchise network. It operates 69 stores and 5 mobile franchises under the Swimart names, and 15 WaterShoppe stores. Waterco Limited was founded in 1981 and is headquartered in Rydalmere, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 10:33
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.